Me again. A journalist we know at zee Telegraph is writing an article on FTB deals getting cheaper (whilst lower LTVs are getting more expensive). She wants to know if there is a sweet spot in the next couple of months to take advantage of competitive 95% LTV deals? Just 2-3 lines will do. Remember, keep it short and punchy, not a rambling essay! Deadline is 11am so go go go!
9 responses from the Newspage community
"Traditionally, the mortgage industry shuts down for Christmas and then becomes manically busy in January as everyone has made buying a new home top of their New Year's priority list. Smart first time buyers will use the first three weeks of December to find a property, complete a mortgage application and sit back and enjoy their Christmas."
"If you are in a position to apply for a mortgage now, apply for the mortgage now. Waiting around for a further reduction in rates is a gamble, as it may never come, but more importantly there are too many other variables to spoil your party. What if you hold out and see a 0.1% reduction in the rate, but house prices go up 0.1% while you wait? Or what if the lender whose criteria you met changes its rules in the meantime and will no longer lend to you? A bird in the hand, as the saying goes."
"Lenders have been making their first-time buyer rates more attractive as they continue to push for business at a time when the property market traditionally slows down. Thankfully there is a large choice of low deposit mortgages available to help borrowers get on the property ladder and the rates are still impressively cheap. If you would like the lowest monthly repayments then opt for a two-year fix. There are 5-year low deposit mortgages but you will pay a premium for the security. Halfifax has a 1.64% two-year fix for borrowers with a 10% deposit and Leeds Building Society has a decent 5% deposit rate at 2.44%, which is also a two year fix."
"We often see lenders offering their own 'Black Friday' deals as the festive season approaches, and it can be a very opportunistic time of year to secure a mortgage product. All banks and building societies will have targets for each year, based on the number of people and amount of mortgage lending they want to approve. As we head towards the end of the year many lenders will start offering box office deals to boost the amount of applications they receive to hit these targets, with rates then being withdrawn as we head into the new year. "The key thing to remember is that even once you have applied you are able to change your mortgage product if a better deal becomes available. Ensure whichever broker you use regularly reviews the market for you up until completion to ensure that once you sign on the dotted line you know it's the very best option available."
"Some lenders allow you to change what product you are on after the mortgage has been offered but before the mortgage completes. This means that mortgages I got agreed five months ago have been able to take advantage of the rates that fell lower than what they originally had agreed. With that in mind, it's probably best to act as soon as you can take advantage of any decrease in rates, but have the lowest cost option secured in case they creep up."
"Mortgage rates will continue to go up and down like a YOYO for the next 12-18 months so if you need to review your mortgage now, do it. If you need to move and need a mortgage right now, do it as trying to sit around waiting for deals to change or get cheaper may never come as the changes are nominal so small that for most borrowers they won't even notice so waiting around to see if a rate goes up or down by 0.1% whilst you potentially lose out on your dream home and at the same time lenders to then change their criteria and requirements is a dangerous game to be playing especially if you need a home."
"Lenders are left with small margins to compete on with the base rate being held. The biggest margin that can be squeezed is the 95% LTV products with the lenders risk then falling onto the stability of the property market, which looks rather strong. It is difficult to predict the optimum time to strike in order to obtain the best rate but once you have submitted a mortgage application the rate you applied for will be secured and most lenders will allow you to switch to a different product during the application process if they reduce their rates, so it makes sense to lock something in and then keep an eye on the market."
"The world is full of Black Friday offers at the moment and the mortgage market is no exception. Even though there is talk of interest rates increasing in the near future, there is still a healthy dose of competitive pressure between lenders, especially in the high loan-to-value first-time-buyer space. The next few months always represent a bit of a mortgage sweet spot as lenders look to build up a pipeline to get the New Year off to a good start. However, this may not last for too long and we are likely to see a period of lenders decreasing and increasing rates as these two forces fight it out for supremacy." First-Time Buyers should always buy when it is right and affordable for them to do so, trying to play the market is fraught with danger.
"Sharp-witted FTB'ers will make getting a mortgage in principle the top of their Christmas shopping list. Getting a decision in principle can lock in the current deal for up to three months, yet still give you the flexibility to change your mind later if something better comes along. Why not have your pudding and eat it?"